Turkey banned payment operations with cryptocurrencies

30-04-2021

Since April 30, Turkey has banned the use of cryptocurrencies as a means of payment. Local trading platforms have stopped all operations to exchange national currency for digital coins. The Central Bank announced its plans to impose restrictions on cryptocurrency trading as early as April 16. 

Causes and Consequences 

Representatives of the Turkish authorities named several reasons that prompted them to introduce a ban on transactions with cryptocurrencies:

  1. The desire to preserve citizens’ trust in already existing instruments and payment methods.
  2. The need to develop a balanced system for storing digital assets and payments using them. According to the chairman of the Central Bank of Turkey, it is desirable to avoid transactions with cryptocurrencies until then.
  3. The suppression of the exchange of digital money, both direct and through intermediaries.

Representatives of the regulatory authorities also explained the need for the restrictions by the high probability of “irreparable losses”. Settlement operations with cryptocurrencies on all online services, payment systems, and financial platforms, the activity of which is confirmed by a license, fell under the ban. Such platforms were deprived of the opportunity to use existing and develop new ways of calculation with digital money. At the same time, the chairman of the Central Bank stressed that the government does not seek to ban the entire cryptocurrency ecosystem. The ban, presumably, may eventually be lifted or softened.

Notably, two cryptocurrency exchanges in Turkey left the market in April: Thodex and Vebitcoin. The first trading platform announced on April 20 that it was suspending customer service due to technical work. Then it became known that the head of the crypto exchange left the country and was declared wanted. Vebitcoin accounts were blocked by the authorities due to financial difficulties.

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